Singapore LCC carriers in JV push

Singapore’s Tigerair and Scoot have both announced joint ventures in third countries and also plan a deep-seated alliance between the two LCCs.

Tigerair plans to establish a joint venture in Taiwan with China Airlines and has also agreed a codeshare deal with India’s Spicejet. Scoot, meanwhile, is planning a joint venture in Thailand with Nok Air that will concentrate on medium-to-long hauls routes.

Tigerair will hold a 10% stake in Tigerair Taiwan, which will have a paid-up capital of NTD two billion (approximately SS$85 million, or US$68 million).

Group CEO of Tigerair, Koay Peng Yen, said, “The new joint venture will allow us to extend our presence into the new untapped markets of Taiwan, Japan, and Korea.”
Sun Hung-Hsiang, chairman of China Airlines, said: “China Airlines’ knowledge of the Taiwan market coupled with Tigerair’s expertise in the no-frills sector should stimulate demand in the civil aviation market here.”

The joint venture between Scoot and Nok Air, NokScoot, will be based at Bangkok’s Don Mueang International Airport and will operate widebody aircraft on medium and long-haul international routes. Nok’s stake will be up to 51% and Scoot will have 49%. The initial investment will be THB2 billion (about S$80 million). The establishment of the new airline is subject to regulatory approvals.

The Tigerair and SpiceJet three-year interline will see customers travelling on SpiceJet’s domestic network from 14 Indian cities including Bombay, Delhi and Coimbatore connecting at Hyderabad onto Tigerair’s Singapore-bound flights.

In the same way, starting from 31 January, Tigerair customers will be able to interline on SpiceJet’s domestic network in India. Meanwhile back in Singapore, both Tigerair and Scoot will submit an application to the Competition Commission of Singapore for anti-trust immunity. Approval would allow the airlines to build upon their existing interline cooperation, which currently enables passengers from outside Singapore to purchase itineraries involving the services of both airlines, for example Jakarta to Singapore (operated by Tigerair), and onward from Singapore to Tianjin (operated by Scoot).

The present cooperation mainly benefits travellers who live outside of Singapore, but the proposed enhancements will serve the interests of Singapore residents as well.
“These could potentially include the joint operation, sales and marketing of parallel routes, which will offer customers increased flexibility and flight options. It could also include alignment of policies, conditions, pricing and scheduling, to pave the way for a seamless integration of systems and improved connectivity,” said the carriers in a statement.